Intercell AG rose the most since January after the Austrian vaccine maker agreed to sell itself to Vivalis SA of France for about 124.5 million euros ($164 million) following setbacks in clinical trials.
Intercell jumped 13 percent to close at 1.96 euros in Vienna, giving the company a market value of 108.2 million euros. The gain was the biggest since Jan. 30. Vivalis fell 6.1 percent to 6.94 euros in Paris.
Shareholders of Vienna-based Intercell will receive Vivalis stock valued at 2.26 euros a share, according to Bloomberg calculations based on Vivalis’s stock price today and terms of the deal outlined in a joint statement late yesterday. That’s about 30 percent above Intercell’s Dec. 14 closing price.
A competing bid is “relatively unlikely” even though the deal allows for a higher offer to be made for either party, Thomas Lingelbach, Intercell’s chief executive officer, said in a telephone interview today. There’s no breakup fee, he said.
The combination of the two companies “represents an excellent strategic fit which takes advantage of complementary skills and assets and provides a more resilient base for future growth than either company had alone,” Gary Waanders, an analyst at Nomura Code Securities Ltd. in London, wrote in a note to clients.
Vivalis, a vaccine developer that has partnerships with Sanofi and other drugmakers, plans to change its name to Valneva SE when the acquisition closes and move its headquarters from Saint-Herblain, near Nantes in western France, to Lyon in eastern France.
The new entity will aim to be profitable by 2015, Lingelbach said. Neither company has made a profit since 2008. Valneva will also look to sell or find a partner for Vivalis’s contract-manufacturing unit and Intercell’s antibody unit. The businesses could fetch about 5 million euros each, Lingelbach and Vivalis CEO Franck Grimaud said.
Intercell was advised by Goldman Sachs Group Inc. and Vivalis was advised by Societe Generale SA.
Before today, Intercell’s stock had plunged 95 percent from its 2008 peak after a vaccine patch to prevent diarrhea in travelers failed in two patient studies in 2010, and partner Merck & Co. stopped testing the company’s experimental vaccine against a deadly hospital infection.
Stockholders will receive 13 Vivalis ordinary shares for every 40 Intercell ones they own. They also will get 13 new preferred shares for every 40 Intercell shares. Each preferred share will convert into 0.4810 of a Valneva ordinary share if Intercell’s vaccine against infections caused by the Pseudomonas aeruginosa bacterium is approved for sale in the U.S. or Europe.
Valneva plans a 40 million-euro rights issue after completion of the deal, which the companies expect in May. The French government’s Strategic Investment Fund agreed to participate in the offering for as much as 25 million euros, the companies said.
The companies described the transaction as a merger of equals. Based on the current issued share capital, Vivalis shareholders will own 55 percent of the combined entity, while Intercell holders will have 45 percent.
Lingelbach will be the CEO of Valneva, while Vivalis Chairman Frederic Grimaud will become chairman. The supervisory board will be split evenly between Vivalis and Intercell, and one member from the French fund.
Intercell had sales of 33 million euros last year from its sole marketed product, a vaccine called Ixiaro against Japanese encephalitis. The company’s largest shareholder is Swiss drugmaker Novartis AG, with 13 percent. Novartis supports the deal, Lingelbach said.
Vivalis was founded by Groupe Grimaud, which controls 51 percent of the stock, according to data compiled by Bloomberg. The company sells cells used in the production and research of vaccines and antibodies. It had sales of 10 million euros last year.